Monday 29 July 2013

Volatility somewhat higher

With the main indexes closing moderately lower, the VIX managed a closing gain of 5.3% @ 13.39, having spiked to 13.86. Underlying momentum is swinging back to the equity bears, but a further VIX wave lower looks likely..which would make for some interesting divergences.




The hourly MACD (blue bar histogram) cycle is set to go negative at the Tuesday open, and that sure doesn't bode well for the equity bears across tomorrow.

Similarly, the daily charts saw the VIX close with a black-fail candle, and those are very often warnings of further equity upside.

more later..on the indexes

Closing Brief

The main indexes closed with very minor declines, the sp -6pts @ 1685. The two market leaders, Trans/R2K saw more significant falls of 1.1% and 0.7% respectively. Despite the declines, market still looks set for further upside across Tue/Wednesday.



Not the most exciting of days, indeed, after the late morning low in the low 1680s, it turned out rather dull.

Yes, the VIX spiked 8%, but that still makes for a VIX in the 13s. Equity bears really can't get the least bit confident until VIX 15/16s.

*The bears do have something of a window though, in that there is no sig' QE across Tue/Wed.


the usual bits and pieces across the evening

3pm update - melt into the close

With the bears exhausting their power at sp'1681, the bulls are seeing the usual latter day recovery/rally. A close in the 1690s looks very viable, and that will open up the still elusive 1700s early Tuesday. Oil is marginally red, along with the metals.



All things considered, we're more likely to rally..than slip into the close.

Bears had their chance, and instead of breaking back into the 1670s, they've left a rather clear inverse H/S formation, which is highly suggestive of the 1700s tomorrow.

SLV is still weak, but holding within a broader up channel.

*I've a 'last line in the sand' long-stop at 19.00.

Best case upside into late Tue/early Wed' 19.75/20.25

2pm update - weekly charts looking tired

The main indexes are holding moderate declines, and despite an expected little more upside in the near term, the weekly charts are starting to looking particularly tired. If sp'1710/20s are hit later this week, the market will be well over-extended.



A long week ahead, but for the bears out there, the current candle on the rainbow chart is indeed a blue one, the first bit of weakness since the June'24 low - as seen across a number of indexes.

I'm still assuming a little more upside..before the reversal though.

Plenty of econ-data this week to give the market an excuse to ramp, never mind the 'we won't taper' FOMC.

AAPL, nothing bearish in the near term...

Indeed, a hit/test of the 200 day MA in the mid 470s looks a given.

1pm update - latter day recovery

The main indexes are still moderately lower, but the bears look powerless to muster any more downside today..or even tomorrow. A possible inv. H/S formation is offering the low sp'1700s within the immediate term.



Not much to add, aside that it does look we'll rally into the close. Best case for the bulls....a Tuesday gap higher..right into the 1700s, which will open up 1720s for FOMC Wednesday.

VIX update from Mr T.

Clearly, very few are seeing imminent threat of significant VIX upside.

12pm update - minor down cycle complete

The bears look exhausted after another minor down cycle. Once again, we look set for latter day ramp, with the mid sp'1690s very much viable at the close. Metals and Oil are recovering, and look set to close moderately green. VIX appears to have maxed out at 13.86




A rather clear inverse H/S (not labelled) on the 15min cycle. Bulls merely needed to hold 1680..and so far, looks okay.

I've added a micro-count to the hourly charts, seeking upside into at least early Wednesday.

Target remains sp'1710/20s.

time to shop...and then lunch!

11am update - bears are still weak

The market is holding moderate declines, but like the previous one thousand trading days, there is little reason why the bulls won't manage a latter day rally. Precious metals and Oil remain somewhat weak, despite the probability of QE-taper this Wednesday effectively zero.



There really isn't much to say, other than the bears have again managed morning declines, but...why will we not rally into the afternoon, as we have so many times before?

Still no significant power on the bear side...sp'1710/20s still the target.

*I'm still long SLV, but if it breaks <19.00...I get the boot.

Notable movers so far today, AAPL and FB, both significantly higher, and that doesn't bode well for those equity bears looking for downside into the Monday close.

11.28am... possible inv H/S setting up...more clearly seen on the 15min cycle....

bulls MUST hold 1680...I'm guessing they do.

10am update - upward pressure

Despite a slightly weak open, the underlying pressure remains to the upside, with the main indexes already close to turning green. Bulls still look set for the sp'1710/20s this week. VIX hourly chart is offering a classic black-fail candle to start the week.




It really doesn't look good for equity bears, not least with a $3bn QE-pomo due to kick in this hour.

A close in the low sp'1700s looks very viable by the close of today, and that should open up another 10-20pts across Tue/Wednesday.

Precious metals look choppy..

SLV needs to hold the 19.00s at the close of today. Hourly pressure is currently in favour of upside.

Pre-Market Brief

Good morning. Futures are a touch lower, sp -3pts, we're set to open at 1688. Precious metals and Oil are slightly higher, with a fractionally stronger USD. Market will no doubt be focused on a very broad array of econ-data later this week, along with another FOMC.



Today will likely be the quietest day of the week, things really don't get going until tomorrow.

Considering the price action last Friday, we'll surely close higher today, and with QE of $3bn, the bulls could manage their first close in the sp'1700s.

*I am still long SLV, and seeking an exit later this morning. I'm certainly looking to short the indexes, but no earlier than Wednesday morning, and preferably in the sp'1710/20s.

9.04am... and the metals break to the downside. Hmm. Hourly charts are still suggestive of broader gains as the day progresses.